Deficiencies found by inspector - who pays for them?

Question

When an inspector finds Deficiencies in a home that need to be fixed (thats put in their report), who ends up paying for these deficiencies? Is it the seller?

Jordan Moorhead · Answer

@Andrew Bissada nobody ever fixes all of the huge laundry list of things found during an inspection. What you do is you use this list to negotiate. Either for repairs, discounts, credits or all of the above. I usually just go for the discounts or credits personally.

Andrew Bissada · Answer

Hi @David M.

I live in Austin and am looking to buy my first house as a househack (either SFH or duplex).

A lot of houses in the areas im interested in are from the 80s,90s, and early 2000s.

Im not particularly looking for a fixer upper. I'm new at this but I would guess that what they need would fall under minor repairs as opposed to major repairs (atleast when I look at the definitions listed here : https://homeguides.sfgate.com/definition-fixer-upper-7780.html  ) . After reviewing a few sample estimates, I was surprised how many items show up on the reports. I wonder when they find fungal growth or water spots why these are considered as unimportant and the seller would not fix them.

Ultimately I'd like to get an understanding of what I should expect with homes of that age, and specifically what I as the buyer will actually need to repair within the first year?

David M. · Answer

@Andrew Bissada

First of all, inspectors put everything they find in the report.  Whether you think it’s because they are trying to proove their worth or because they are just documenting, they do.  With electronic reporting, I’m seeeing now they are colour coding their findings which helps the newbie buyer.

That being said it’s all negotiable, at least in no.  Buyer can make their list, and the seller can choose their mix of won’t address, will address, or provide a credit basically.  This is where the whole “reasonable/unreseasonable” opinions or arguments develop.

Good luck

Jai Reddy · Answer

@Andrew Bissada

The options after an inspection for Buyer and Seller should’ve been in the Purchase Contract. If not, like said above, negotiable

David M. · Answer

@Andrew Bissada

So you aren't asking for negotiation purposes, you are just being concerned about how to maintain a house?

No, most inspection reports won't give you the install dates.  Most systems won't have their install date on them.  Since most inspectors, at least around me, have electronic systems for their reports there isn't time to get that info.  Usually, I get the reports emailed to me when they leave.  But, you should be able to lookup all the systems if you are that concerned.  You'd call each manufacturer with the s/n to see when it was was mfg or installed (if it was registered by the installer).

Its admirable you want to know everything about, just don't get bogged down with it.  Honestly, these are some of the things you should be looking at when you first view the house.

Andrew Bissada · Answer

@David M. Yes I am trying to get an understanding of what is involved with a house that is not new, since this is my first time. I want to understand this before making a purchase on something I will likely be in for years, and will be putting down tens of thousands of dollars for on a down payment. I need to know these things before the purchase. As far as life of major systems, that has been a query of mine. From what I've read and asked, it seems that the inspection report doesn't list the ages, and sometimes the seller doesn't even know the ages of every major system, especially if they aren't the original owner.

David M. · Answer

@Andrew Bissada

Hmm..  well, I have no idea about Austin, much less Texas..

But, I think you need to get back to “basics” with what you are asking.  What do you NEED to fix in the first year? Well, whatever needs fixing....

Figure out the age / life of the major systems of the house (roof, siding, windows, hvac, well, septic, driveway, etc).  Helps to have an extra set of eyes to help you look over everything— or just have a really good home inspector.  Then there are the remodeling stuff: ie kitchen, baths, flooring, decking etc.  minor stuff is more cosmetic such as paint and small repairs

Either ages if your homes at 20-40 years, pretty all the major systems will need replacing or should have been replaced at leas once

Does that help?  I think you just need more experience

Andres Bustamante · Answer

I always ask my client what his top 3 priorities are after looking at the Inspection Report.

Once I know what the priorities are I typically get quotes from professionals in each particular field. After getting the quotes I attach them to the Inspection report and send this to the listing agent asking for whatever closing costs the quotes support.

I can send you a copy of the most recent email I sent asking for closing costs, I got $10,000 in Closing Costs.

Theresa Harris · Answer

What is it and how much will it cost?  What is the price of the home and your offer price?

David M. · Answer

@Andrew Bissada

Well, it kinda depends...  I'm a "nicer" investor and when I see a distressed home, I bid accordingly.  Some are "nastier" and who try to ask for credits because the house is in disrepair.  From my point of view, what is the rationale for trying to buy a fixer-upper and then "complain" that there are problems with it.  Again, for an investment, I want to be sure i'm not walking into a money pit such as bad foundations, significant wood rot, a really failed septic, etc.

Are you asking about a fixer-upper?

For a "regular" home, the life and safety items generally should be addressed.  If the major utilities are functioning, its usually not reasonable to get it replaced.  You might ask for a small credit.  For example, a 10 year old water heater maybe ask for something and maybe get $250 credit..  If you really think the property was over priced relative to the condition of the property, then maybe you should chip away at the price.

Then, there are some little things like failed GFCI's, a loose electrical cover plate...   Sometimes the small stuff, albeit annoying, don't really cost much so not the end of the world to ask the seller to take care of it so you don't have to when moving in...

Again, you need to take into account the situation, which I have no idea in what context you are asking.

To give you another example.  For one of the houses I flipped, my inspector was about to start inspecting the kitchen, and stopped to ask me what was he doing here.  Well, I was going to remodel the kitchen get new appliances --- so moving right along to the next room..  Oh yeah, remodeling the powder room --- moving right along.  Of course, he charged me half since I only cared about the major stuff.

If you were one of my clients just buying a regular home to live in, my guidance would be slightly different.

Make sense?  It really depends on the situation.

Deficiencies found by inspector - who pays for them?

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